Leading farm exporters buoyed by TPP-11 signing

GRAIN, dairy and beef exports are set to be big winners under the revamped Trans-Pacific Partnership (TPP-11).

After the deal was formally signed last week in Chile, GrainGrowers Trade and Economics Manager, Luke Mathews, said that TPP-11 was critical in delivering direct benefits to Australian grain farmers and for sending a strong positive message to those individuals and nations that seek to implement destructive protectionist policies.

Mr Mathews said the TPP-11 included five of Australia’s important grain exports markets in Japan, Vietnam, Malaysia, New Zealand and Singapore, which accounted for 15-20 per cent of Australian grain trade.

He said the Australian grain industry already had preferential access into a number of TPP-11 countries because of existing trade agreements like the ASEAN-Australia-New Zealand Free Trade Agreement and the Japan-Australia Economic Partnership Agreement.

But the new deal would build on this existing market access, he said.

“In particular, TPP-11 will result in improved market access for Australian wheat and barley into the important Japanese market,” he said.

“TPP-11 also improves access for Australian wheat and barley into the very large and rapidly expanding Mexican market."

Mr Mathews said GrainGrowers strongly supported a trade liberalisation agenda which focussed on addressing both tariff, quota and non-tariff barriers to trade like sanitary and phytosanitary measures and inconsistent trade rules.

“About 60pc of all grain grown in Australia is sold offshore, generating export returns of $11.8b per year,” he said.

“As such, we strongly encourage the Australian government to vigorously pursue and conclude the Indonesia-Australia Comprehensive Economic Partnership Agreement, the Regional Comprehensive Economic Partnership - which includes the critical ASEAN, Indian and Chinese markets - and the Australia-European Union Free Trade Agreement.

“Significant improvements for agriculture and grains market access, including addressing non-tariff barriers to trade, must be achieved as part of these negotiations.”

Under the new agreement, Canada will eliminate its 26.5 per cent tariff on Australian beef imports over five years, instead of the 10 years agreed under the original TPP deal.

The Red Meat Advisory Council which represents groups like the Cattle Council of Australia and the Australian Meat Industry Council said the TPP-11 was the largest agreement of its kind and is the result of many years of negotiations.

RMAC Chair Don Mackay said the TPP-11 signing was “a significant milestone” for the Australian red meat industry, and entry into force would see enhanced market access gains in key red meat markets such as Japan, Mexico and Canada and offer new export opportunities across the Asia-Pacific region.

“The Australian red meat and livestock industry has been a strong supporter of the Australian government’s efforts in pursuing these negotiations, given the prospect of improving the competitiveness of Australian product in our international markets,” he said.

“Industry will continue to advocate for swift ratification and entry into force of the TPP-11 with the first tranche of tariff cuts being an important step in realising the benefits of the agreement.”

Littleproud’s view

Agriculture and Water Resources Minister David Littleproud said the TPP-11 signing would provide preferential access for more than $5.5b of Australia’s dutiable agricultural exports.

Mr Littleproud said the trade deal would have an immediate benefit for exporters and create brand new opportunities into two new markets – Canada and Mexico.

“This is the world’s largest ever regional trade agreement, creating huge opportunities for our beef, sheep, dairy, sugar, wool, wine and horticulture producers in current and new markets,” he said.

“My department is supporting industry’s efforts to improve sheep meat export arrangements to Mexico, to capitalise on Mexico’s elimination of tariffs on sheep meat within eight years of entry into force.

“Into Japan Australia is seeking to regain access for blueberries and improve market access for other horticulture commodities, including mangoes.

“Work is ongoing to establish technical market access for Australian beef exports to Peru to take advantage of market access outcomes from both the TPP-11 and the Peru-Australia Free Trade Agreement.

“Last year Australia exported around $12 billion worth of agricultural goods to the TPP-11 countries, so this is a real game changer with huge potential.”

TPP-11 highlights

• new access for dairy products into Japan, Canada and Mexico, including the elimination of a range of cheese tariffs into Japan covering over $100 million of trade;

• new sugar access into the Japanese, Canadian and Mexican markets;

• tariff reductions and new access for Australian cereals and grains exporters into Japan, including new access for rice products into Japan for the first time in 20 years;

• elimination of all tariffs on sheepmeat, cotton and wool;

• and elimination of tariffs on seafood, horticulture and wine.

The Australian Dairy Industry Council (ADIC) said the new TPP-11 agreement would deliver an improvement in Australian dairy market access arrangements into Japan - Australia’s largest cheese export market.

ADIC said Australia already had a trade agreement in place with Japan – the Japan Australia Economic Partnership Agreement (JAEPA) – but the market access provided under TPP-11 delivered improvements in some areas that were excluded under JAEPA.

There will also be some improvements in market access into other markets including Mexico, Peru and Canada, the industry group said.

ADIC CEO David Inall said, importantly, the Australian dairy would maintain its competitive position into the TPP-11 markets and continue to be a key supplier into TPP-11 member countries as well as an important player in dairy supply chains across the region.

He said the TPP-11 was resurrected from the former TPP agreement which appeared to reach a dead end when the US announced that it would withdraw from the agreement in early 2017.

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